Blackstone Buys Lab Office Portfolio from Brookfield for $3.45B
The 2.3 million square foot portfolio is largely located in East Cambridge, Mass.
Blackstone Property Partners Life Sciences has struck a deal to acquire a 2.3 million square foot portfolio of lab office buildings from a Brookfield Asset Management real estate fund for $3.45 billion. BPPLS is the asset manager’s core+ return life sciences strategy that owns BioMed Realty, which Blackstone recently recapped with its existing investors.
The transaction is expected to close in the first quarter of 2021 subject to customary closing conditions.
Approximately 90% of the portfolio is concentrated in Cambridge, Mass. Once the deal closes, Blackstone says it will be the largest life science office owner in that market, and BioMed Realty, which will have an enterprise value of approximately $20 billion, will have two-thirds of its platform concentrated in the Boston/Cambridge market.
Cambridge is one of the fastest growing lab office submarkets in the country and the portfolio that Blackstone is acquiring, which is in East Cambridge, is next to the Massachusetts Institute of Technology and leased to blue-chip tenants.
“This transaction illustrates Blackstone’s continued conviction in the life sciences space both broadly, and within real estate, investing in best-in-class assets located adjacent to top-tier research and education institutions,” said Nadeem Meghji, head of Real Estate Americas, in prepared remarks.
Indeed the life sciences real estate sector is booming right now as investors plough capital into these facilities. More than $16 billion has been put to work by private investors in this category during the first half of 2020, while the National Institutes of Health continues to up its grant volume, according to JLL.
Deutsche Bank Securities, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are serving as financial advisors to Blackstone, and Simpson Thacher & Bartlett LLP is serving as legal advisor. Eastdil Secured is serving as lead financial advisor to Brookfield, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor. Citigroup Global Markets Inc. also provided financial advisory services to Brookfield in connection with the transaction.